Here at VRC CLaims, we receive hundreds of enquiries on a weekly basis. Many of whom are contacting us for our free telephone consultations. We offer this service to allow timeshare owners to get answers about terminating their contracts. The most popular question we are asked is whether or not they should stop paying their maintenance fees. Unfortunately, a lot of people only hear what they want to hear. Not only are their nearest and dearest giving them advice on something they do not understand, but to make things worse, deceitful timeshare release companies are also giving false information!
Why are some people advising me to stop paying maintenance fees?
Many scam timeshare exit companies are giving incorrect information to strum up new business. Any legitimate company will tell you that you have a legally binding contract and are obligated by law to pay these fees. As a result of this, consumers will reach out to multiple companies until someone tells them what they really want to hear. If you ask enough people, you will eventually come across some of the many unscrupulous companies that are operating. These companies are telling customers that once they pay their high, upfront fees, all their problems will go away. Including debts owed to the management company! Preying on people who are desperate to relinquish any responsibility of their timeshare debts.
Have people got away without paying these fees?
The contract that you signed when you purchased your timeshare is a clear agreement between yourself and the management company. This agreement states that you are responsible to pay your share of the fees to maintain the property. This is a legal contract, if you breach this, the management company are 100% within their rights to pass the debt on to a collection agency.
You have probably seen on many timeshare forums or heard people state that they have walked away from their timeshares and never been forced to pay their debts. One of 3 things could have happened. Either, they have been extremely lucky and it has somehow been forgotten about and lost in the system, the timeshare resort made more money by repossessing the timeshare and selling on for a profit or the timeshare resort will come after them years down the line with added interest.
What happens to the majority?
The majority of people who owe money to management companies do so because they have been told to stop paying the maintenance fees by a deceitful exit company. They based their whole business sales strategy on telling clients that they would not need to pay these debts once they pay them an up front fee. These upfront fees are usually in excess of £5000. These customers are happy in the piece of mind that the burden has been lifted... until their next maintenance bill arrives. After contacting their exit company, clients are told to ignore the bill and that they would sort it out on their behalf. This continues for a few years until the around the third year. The demands for the debts to be paid are now stronger and threatening. At this point the debts are often sold to a debt collection agency.
What happens once the debt is passed onto the collection agency?
This is when the real problems arise. The debt collection agencies will start to add on high interest, late payment charges and legal fees that they have endured. These debts will need to be paid. Failure to pay in full or set up a payment plan will result in the debts to be taken to court.
Once your case is taken to the County Court, it is for them to look at the evidence and decide who is liable to pay these debts. They will not be looking at the "exit company" that told you not to pay these debts. They will be looking at the legally binding contract with your signature at the bottom of the page agreeing to pay these fees. On paper, your debt is clearly your responsibility and failure to pay, will result in you being issued with a CCJ (County Court Judgment).
In most cases mentioned to us at VRC Claims, people choose to pay up and avoid all the negativity that will follow with having a CCJ registered against you. The total debt is now well above what the resort initially had asked for.
Timeshare companies do chase unpaid maintenance fees. Think how much pressure was put on you when buying the timeshare. They apply such strong sales tactics to get you to buy a timeshare, that in most cases you did not want to buy. Now they are legally entitled to your money, and they will pursue you for it!
Ona Group takes legal action 10 years after customers stop paying maintenance fees
Some companies will be more demanding than others, the most popular complaint we hear at VRC Claims are about Ona Group. Ona Group have issued court proceedings against many of the past owners of Cala Pi, Mallorca.
Ona Group took over the management of Cala Pi quite a few years ago. From what we have been told, they then immediately began to contact ex-owners over management fee arrears. Ex-owners are stating that they handed back the timeshares more than 10 years ago with an agreement to stop all maintenance fees. When questioning Ona Group, they have been told that there was no proof of the timeshares being handed back legally and that they are still liable for more than 10 years worth of annual fees, with added interest. These management debts now stand and failure to pay is resulting in court proceedings.
Always, ensure to document any agreement made with a timeshare company. Never take their word for it. The BBC reported on scams ran by timeshare exit company Monster Travel back in 2006. Monster has since relinquished, however, there are still many companies out there that are telling customers that they do not need to pay their maintenance fees. They do so in order to take upfront fees for themselves to provide a service that rarely materialises. Read full article by BBC Scotland www.bbc.com/news/uk-scotland-timeshare-exit-fraud